A group of self-employed workers is characterized by tax obligations differentiated from the rest of the self-employed. We refer to self-employed workers registered in the Special Regime of Self-Employed Workers (RETA). Their activity is linked to an autonomous business head to whom they are related up to the second degree of consanguinity.
What are the tax obligations of the self-employed collaborator? Pay attention to the following lines.
High in the RETA of the Autonomous Collaborator
What are the requirements for contributing to Social Security as a self-employed collaborator? This figure is subject to a series of conditions to become part of the self-employed regime:
- Direct family member means spouse, descendants, ascendants, and other relatives of the employer—consanguinity or affinity up to the second degree inclusive and, where appropriate, by adoption.
- They are employed in their center or work centers regularly, they share a place of work with the self-employed person, and it is not a punctual collaboration.
- Share the same place of residence with the self-employed owner.
- Have at least 16 years of age.
How to Manage the Registration of the Autonomous Employee in Social Security
If you do not know the method as a self-employed collaborator, you can either follow the detailed steps below or ignore the process that relies on online advice. While you think about it, we anticipate that for the registration in Social Security as a self-employed collaborator, you need to present:
- The model TA0521 / 2 corresponds to the application for registration in the special self-employed regime for a family member of the holding owner.
- Family book.
- DNI.
- Copy of registration in the Treasury of the business owner that must be the direct relative and the taxpayer, as we will see later.
Obligations with the Treasury of the Self-employed Worker
Self-employed collaborators must follow tax obligations. The collaborator does not have taxpayer economic activity status. Therefore, you do not have to register with the Treasury, and you will not have to pay IVA and IRPF quarterly.
Among the taxes that, as a self-employed collaborator, you will have to present is the Income Tax Declaration in your taxpayer status based on the income obtained through payroll.
Obligations of the Self-employed Person with the Self-employed Worker
We have already seen that whoever assumes the fiscal burden of the economic activity, the independent collaborator, is a subsidiary and an autonomous holder. The latter also has acquired the following obligations with the self-employed collaborator.
Make the payment of contributions to the Social Security of the self-employed collaborator. Pay your salary and deliver the corresponding payroll according to the professional category and the applicable agreement.
Obligations for Tax for Self-employment
Self-employed people must pay this tax as it is the employer’s portion of Social Security and Medicare. Employees must pay 7.65% self-employment tax, and self-employed people pay 15.30%. For 2024, each employee and employer must pay a wage limit of $168,600 and a 6.2% Social Security tax. The Medicare tax rate for each employee and employer is 1.45%, with no wage limit. This tax will cost you less than you imagine as you deduct half of your self-employment tax from your net income. The IRS considers the employer’s self-employment tax as their business expenditures, and you can remove it according to it. So, business owners pay 92.35% of their total income, their total business income, rather than their gross credit rate.
Tax Obligations for Health Insurance Premiums
Self-employed people can pay health insurance premiums if they are not eligible for coverage through their spouse. In this way, you can deduct all your tips. This payment is to give the courage to your children (younger than twenty-seven at year-end), dependents, and spouse. You can evaluate the deduction using the Self-Employed Health Insurance Deduction Worksheet in the IRS publication. Also, you can deduct all of your qualified long-term care insurance premiums, including health and dental.
Meals
You must pay a tax on meals as significant business expenses, especially when traveling for business or entertaining clients. The meal’s tax deduction for business owners is around 50% of the actual price of the total feed. Remember to have a receipt with you. You can pay a standard meal allowance that can be 50%. That is why you must know the purpose of the travel, time, and place. In this case, you will not need your meal receipts.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.